Annual Wage Review 2025

The Fair Work Commission conducted the annual wage review in accordance with the Fair Work Act 2009 (Cth) (FW Act). The Review had two primary functions: to revise the national minimum wage (NMW) order and to assess and adjust the minimum wage rates specified in modern awards. The NMW primarily affects a small segment of the workforce not covered by modern awards or enterprise agreements, while modern awards impact around 20.7 per cent of all employees, particularly those in part-time, casual, and low-wage positions. The Review's implications are more pronounced in sectors like Accommodation and Food Services, Health Care and Social Assistance, Retail Trade, and Administrative and Support Services. The Commission was tasked with balancing multiple considerations under the FW Act, including economic performance, competitiveness, gender equality, social inclusion, and the needs of low-wage workers.

The legal issues before the Court centered on the interpretation and application of the economic considerations outlined in sections 284(1)(a) and 134(1)(f) and (h) of the FW Act. The Court needed to determine how these provisions should guide the Commission's evaluative judgment in setting new minimum wage rates. Specifically, the Court had to understand the scope and implications of these sections, which require balancing national economic performance and competitiveness with the potential impacts on businesses and employment growth. The Court also had to consider the practical effects of the Review on different sectors of the economy, particularly those with a high concentration of modern award-reliant employees.

The Court found that the performance and competitiveness of the national economy, as well as the likely impacts on business and employment growth, should be central to the Commission's decision-making process. The Court emphasized that while inflation had moderated, it remained essential to consider the broader economic indicators, including employment growth, productivity, and the sustainability of the economy. The Court noted that the modern award-reliant workforce, which is disproportionately affected by wage changes, has unique characteristics that should be considered. The Court also highlighted the importance of the Commission's evaluative judgment in balancing these factors to achieve the objectives set out in the FW Act. The Court concluded that the Commission's decision must reflect a comprehensive assessment of these considerations to ensure a fair and balanced outcome.